Leasing Out a Home for the First Time

If you are leasing out an Arizona home for the first time, most of the work happens before your tenant moves in.

The property has to be registered and fit to live in before anybody moves in. Choosing a tenant is governed by rules of its own. Then you decide what kind of tenancy you are offering, prepare the agreement, hand over the required disclosures, take the deposit correctly and record the condition of the property.

None of that is complicated on its own. What matters is knowing about all of it before you hand over the keys, because Arizona expects several of these things to happen at or before the start.

This page is written for the landlord. If you are the tenant, the guide for tenants covers the same ground from your side.

1. Register the Property With the County Assessor

This is the step first-time landlords have usually never heard of, because nothing about it feels like leasing. A separate article of Arizona law, aimed at property used solely as residential rental property, requires the owner to keep certain information on file with the assessor in the county where the property sits.

What goes on file is your name, address and telephone number, the street address and parcel number of the property, and the year the building was built. If the property is owned by a corporation, a partnership, a limited liability company or a trust, an officer, general partner, member or trustee has to be named as well. When any of it changes, you have ten days to update it.

Two things make this worth doing before anybody moves in. The section says residential rental property is not to be occupied while the required information is not on file. And a tenant who finds it missing may hand or mail you a written ten-day notice to comply; if you still have not complied, your tenant may end the tenancy, and you return all prepaid rent, with the deposit going back under the ordinary deposit rules.

The money penalties come from a city or town rather than from the county. For a property you have recently acquired, the figure is one thousand dollars plus another hundred a month until you comply, and the court cannot suspend any of it. Otherwise it is a hundred and fifty dollars a day. Both carry the same escape: comply within ten days of receiving the complaint or the assessor’s notice and the court dismisses it. Registering costs up to ten dollars.

One more if you live outside Arizona. You have to designate and record with the assessor a statutory agent who lives in this state and who will accept legal service on your behalf.

2. Make Sure the Property Is Fit to Live In

Paperwork is not the whole of a landlord’s job. This is the duty that runs from the first day of the tenancy to the last, and it is the one a first-time landlord is most likely to think of as optional maintenance rather than law.

Six obligations sit in the section: the building codes bearing on health and safety, the repairs needed to keep the place fit and habitable, clean and safe common areas, working order for the systems and appliances you supply, waste containers and removal, and water, hot water, heat and cooling where those are installed and offered. A few of them can be moved onto the tenant, on conditions stricter than most people expect.

Go through the property against that list before anybody moves in rather than after the first call. Repairs and habitability sets out all six, the conditions Arizona counts as affecting health and safety, and what a tenant may do if a repair is not made.

3. Choosing a Tenant Is Governed by Fair Housing Law

Advertising the property, taking applications and deciding who gets the keys are governed by law that sits outside the Landlord and Tenant Act. This is where a first-time landlord is likeliest to break a rule without knowing the rule exists.

Two bodies of law apply at once: the federal Fair Housing Act and Arizona’s own fair housing article. Both make it unlawful to refuse to rent to somebody, or to give them different terms, conditions or services, because of race, color, religion, sex, familial status or national origin. Familial status is the one that surprises people. In Arizona it covers a person who is pregnant, a person living with a child under eighteen as parent or legal custodian or with that parent’s written permission, and a person in the process of obtaining custody.

Disability sits in its own section, and it goes further than refusing to rent. Refusing a reasonable accommodation is itself discrimination — a change to your rules, policies, practices or services where the change is needed to give somebody an equal opportunity to use and enjoy the home. So is refusing to permit reasonable modifications to the property, which the tenant pays for. On a modification you may, where it is reasonable, require the interior to be put back as it was, fair wear and tear aside.

Advertising has its own rule and it is broader. No notice, statement or advertisement about renting a home may indicate a preference, a limitation or a discrimination based on any of those characteristics, disability included, or an intention to make one. Wording of the “ideal for a professional couple” or “no children” kind is what the section is aimed at.

Both laws carry exemptions, and one of them is written for something close to the reader of this page: an owner renting out a single family house, holding no more than three of them, without using a real estate agent. The two exemptions are not identical, Arizona’s comes with a further limit where the owner was not the most recent resident, and neither of them covers the advertising rule. An owner who qualifies in every other respect loses the Arizona exemption by publishing an advertisement the advertising section prohibits.

This site does not cover fair housing in depth, and the subject deserves a great deal more than a section. The only other place it comes up is the exemption for an owner living in the same dwelling, set out under leasing a room in your own home. If you are writing an advertisement, setting screening standards or turning down an applicant and you are not sure of the ground you are standing on, this is the part of leasing to put in front of a lawyer.

Screening and application fees are a different question, and the Act says nothing about them. Money collected before a tenancy begins can still raise the separate question of whether it is security, which is where the deposit cap would bite. See rent, late fees and other charges.

4. Decide What Kind of Tenancy You Are Offering

A fixed term and a periodic tenancy give you and your tenant different amounts of certainty and different amounts of flexibility. Decide which one you are offering before you prepare the agreement, because a good deal of what follows hangs off the answer.

Say nothing about the term and Arizona will fill the gap for you. A roomer paying weekly rent gets a week-to-week tenancy; everybody else gets month-to-month. What each choice gives up is on month-to-month or fixed term.

5. Get the Agreement Right

What has to be in it. Arizona leaves the terms largely to the two of you. What it insists on is that a written agreement has all blank spaces completed, and that you tender and deliver a signed copy to your tenant while your tenant signs and delivers one fully executed copy back to you, within a reasonable time. Failing either is treated as a material noncompliance with the agreement rather than an oversight. See what a lease must say.

What cannot be in it. Five kinds of clause are unenforceable in Arizona. A waiver of the tenant’s rights or remedies under the Act. A promise to pay the landlord’s attorney fees, although a written agreement may award fees to whoever prevails. A waiver or limit on the landlord’s own liability, or a promise to indemnify the landlord for it. A waiver or limit on anyone’s right to summon a peace officer or other emergency help. And a monetary penalty for summoning them. A general-purpose form may contain provisions Arizona does not permit, so it is worth reading yours against the list. Deliberately using a clause you know is prohibited exposes you to the tenant’s actual damages plus up to two months’ rent. See what a lease cannot say.

Two smaller ones. Arizona does not require a residential lease to be notarized, and signing the lease explains what the signatures do need. And if you intend to charge a late fee, put it in the written agreement and keep the figure defensible. That is what the Act asks for at the single point it deals with late fees. Rent, late fees and other charges takes that apart, including what the Act does not say.

6. Prepare the Disclosures

Three items have to be in writing and in your tenant’s hands no later than the day the tenancy starts. Who is authorized to manage the property, by name and address. An owner, again by name and address, or anybody authorized to act on the owner’s behalf for service of process and for receiving notices and demands. And a line telling your tenant that the Act is published on the website of the Arizona Department of Housing.

The section asks for the information in writing and does not require a separate document, which is why lease forms commonly carry an owner and manager block. What the agreement cannot do by itself is the part that continues: the information has to be kept current and furnished again whenever your tenant asks for it.

There is no fine for failing to disclose. Instead, the person who failed to comply becomes an agent of each person who is a landlord, for certain purposes. That moves responsibility rather than money, and it is unusual enough to be worth understanding before it applies to you. Required disclosures sets it out.

Depending on the property and the circumstances, more disclosures may apply. Federal lead-based paint requirements can reach older housing. Arizona has bedbug and foreclosure provisions, each carrying exceptions that settle the question for a lot of readers. Those, and the exceptions, are on the same page.

7. Handle the Money Correctly

Add up everything you plan to take before the keys change hands. Arizona caps security, however it is denominated and including prepaid rent, at one and a half months’ rent. The cap is on the total rather than on any single charge, which is what catches a landlord who has priced three separate items and never added them up.

If a fee or a deposit is meant to be nonrefundable, Arizona requires its purpose to be stated in writing by the landlord. Anything not designated as nonrefundable is refundable. Security deposits covers both, including a question the section does not answer either way.

If you will bill your tenant separately for utilities, decide the method now and write it into the agreement. Arizona has a separate set of rules for that: which billing methods are allowed, what the agreement has to say, what an administrative fee may cover and what each bill has to show. See charging tenants for utilities.

8. Do the Move-In Properly

On move in, the section has the landlord furnish three items. The lease, signed. A move-in form on which existing damage can be specified. And written notification that your tenant may attend the move-out inspection. Ask about that inspection and you have to say when it will be.

The move-in form is the step first-time landlords skip most often. Nothing in the section says the two of you have to complete it together, and nothing makes it the only evidence that counts — dated photographs, video and a written inspection record all help. What the form has going for it is that it is made at the time, by the person who is going to be living there, which is hard to reproduce a year later.

During the Tenancy: Entry, and Repairs

Two things account for most of what goes wrong in the middle of a tenancy, and they pull in opposite directions.

Entry. Except in an emergency, or where it is impracticable, give at least two days’ notice of your intent to enter, and enter only at reasonable times. A maintenance or service request from your tenant counts as permission to enter for that request alone, and waives the separate notice. Underneath the two days sits a broader rule: do not abuse the right of access or use it to harass your tenant. Arizona does not define abuse or harassment, so where exactly the line falls would be for a court to decide. See landlord entry.

Repairs. The habitability duties in step 2 do not pause once somebody moves in. They are the reason the maintenance request exists in the first place, and when your tenant tells you something is broken, the duty to keep the systems in good and safe working order is the one that answers.

Know the Deadlines Before You Need Them

Two sets are worth reading now rather than in a hurry later.

Ending a tenancy always takes something in writing, and the notice period depends on why it is ending. The periods, which of them come with a chance to put things right, and how each one is counted are on ending a tenancy.

Returning the deposit runs on fourteen days, excluding Saturdays, Sundays and legal holidays, to hand your tenant an itemized list of the deductions along with whatever is left over. The clock starts once three things have happened: the tenancy has ended, possession has been delivered and your tenant has demanded it.

Waiting for that demand is a poor plan, and the reason sits in the same subsection. Mailing the itemized list starts a separate sixty-day period, after which anything your tenant has not disputed is final. Missing the fourteen days exposes you to twice whatever was wrongfully withheld. Read the deposit procedure before your tenant moves out, not after.

The Short Version

• Register the property with the county assessor, and update the information within ten days of a change.
• Make sure the property is fit to live in, and remember the duty continues through the tenancy.
• Advertise, screen and choose with fair housing law in mind.
• Decide whether the tenancy is fixed term or periodic.
• Use an agreement suited to Arizona, complete every blank, and check it against the prohibited clauses.
• Give the disclosures that apply to your property, in writing, at or before the start.
• Keep everything you take within the deposit cap, and state in writing the purpose of anything nonrefundable.
• On move in, furnish all three items the deposit section names.
• If you bill utilities separately, read the utility rules before you set the method.
• Keep the agreement, the notices, the move-in form and the correspondence.
• Read the entry, termination and deposit-return rules before you need to use them.

Where These Rules Come From

Arizona’s laws are collected in a set called the Arizona Revised Statutes, usually shortened to A.R.S. The number that follows points to one section of it.

You do not need these numbers to use this page. They are here so that you, or a lawyer you hire, can check the exact wording. Each one links to the official text on the Arizona Legislature’s website, which opens in a new tab. Each of the pages linked above explains its own rules in more detail.

• A.R.S. 33-1902 is step 1, and it sits outside the Landlord and Tenant Act. Subsection A is the information the assessor holds and the ten days to update it. B is the statutory agent for an owner living out of state. C is the rule against occupancy while the information is not on file, and the tenant’s ten-day notice. E to G are the civil penalties a city or town may impose, and the ten-day cure that ends them.
• A.R.S. 33-1324 is step 2, the duty to maintain fit premises. Subsection A is the list of duties. C and D are the narrow conditions under which some of them may be moved onto the tenant.
• Fair housing, Arizona. A.R.S. 41-1491.14 is refusing to rent and imposing different terms. 41-1491.15 is advertising. 41-1491.19 is disability, including reasonable accommodations and modifications. 41-1491.01 defines familial status, and 41-1491.02 holds the exemptions.
• Fair housing, federal. 42 U.S.C. 3604 is the federal list of prohibited practices, with advertising in subsection (c) and disability in (f). 42 U.S.C. 3603, subsection (b), holds the federal exemptions and says in its opening words that the advertising rule applies anyway.
• A.R.S. 33-1314, subsection D, is what decides step 4 for you if you skip it.
• A.R.S. 33-1322 carries both step 5 and step 6. Subsections A to C are the disclosures and the duty to keep them current. D is the agency consequence for failing them, and E is the completed blanks and the signed copies.
• A.R.S. 33-1315 lists the five prohibited clauses in subsection A. B is what makes them unenforceable, and sets the damages for deliberately using one.
• A.R.S. 33-1321 is the deposit section. Subsection A sets the ceiling and B the nonrefundable rule. C is the move-in paperwork. D carries the fourteen days, the mailing and the sixty-day period, and E the double damages.
• A.R.S. 33-1343 is access. Subsection B is the maintenance request that carries its own permission, C is the emergency, and D holds the two days, the reasonable times and the no-abuse rule.
• A.R.S. 33-1375 and A.R.S. 33-1368 hold the notice periods for ending a tenancy.